My Food Bag wins the Supreme Business Award in the 2017 Westpac business awards

29 November 2017

My Food Bag is way, way more than just clever answers to the daily 'what shall we have for dinner' question. In this year's Westpac Business Excellence Awards they were recognised for their excellence in customer service and scooped the supreme award for the central region. The awards are delivered annually by Auckland Chamber of Commerce in partnership with Auckland Tourism, Events and Economic Development (ATEED) across the Auckland region.

Cecilia Robinson, co-founder with her husband James of the vibrant company, says this year she stepped back from the awards entry to pass over to her team. It's indicative of the culture the pair, with co-owners Nadia Lim, her husband Carlos Bagrie and Theresa Gattung, have created.

"It is quite humbling to read how the team sees the culture," she says. "It's a transition for me, a reflection of the maturity of the team. It was delightful to read my team's reasons for entering and how proud they were of their divisions. We made it a basis of our board meeting to share about the team and culture."

In less than five years, the company has grown from just five to over 150 employees; passing on the core DNA of the founders has been critical to its success. Robinson says it is simple: customers (whom they call foodies) are at the heart of every decision.

The customer contact centre is called Customer Love (yes, ad-man Kevin Roberts is an active board member). It is staffed by young enthusiasts who have gone on to more senior jobs in pretty much every other division of the company.

Every new hire spends Sundays in the centre - it's delivery day for the bags, so the highest volume of calls and talking with customers happens then. Everyone understands foodies are the heart and hub of the business. Customer love boss Ryleigh Cornes says everyone has as much authority to make decisions to solve a problem as their managers.

"They solve that problem the same way that I would, today. Quickly, correctly and easily," she says. "Plus we like to surprise people so, just for fun, the team can pull chocolates or hot sauces to send to foodies.

"We don't monitor talk time because we want to be on the phone as long as it takes to solve a problem. Over-deliver is another message."

The centre, in the middle of bright, ultra-contemporary offices in Parnell, touches over 41,000 foodies a month, responding to social media feedback in under an hour.

Former New Yorker Meagan Halpin, head of people, says they hire for character: "Being a winner, being bold to make change, being collaborative and being real and direct, that's our character," she says. "And it's a sexy company, when we're feeling good about each other."

Weekly Friday "love box" updates, a mix of facts and figures, rewards and socialising often include staffers' families. The love is shared in the community too, with some 10,000 meals a month given to charities to distribute.

It's not shouted from the rooftop, but part of the company ethos is social sustainability. Waste is tightly managed, with the warehouse goal of zero stock at the end of a Sunday distribution.

Innovation is also core. New ideas are not just one big bang product a year.

In the past 18 months My Food Bag launched two new brands and 13 new products which already bring in over half the company's revenue. The street-front development kitchens and photography studio have a couple of dozen chefs, nutritionists, recipe writers and designers constantly evolving the product.

"Our people - our foodies [customers] are the heart of every decision we make. The food, the customers, those are the most important to us. We want people to feel loved and engaged with us."

NZ Herald

Waterman invests in leading freight and courier business, PBT Group

4 October 2017

Waterman Capital is pleased to announce that it has acquired a majority stake in PBT Group (PBT) alongside founder Peter Baker. PBT is a national freight, courier and logistics operator founded in 1972 by Peter Baker. The business has nationwide depot network of 20 branches and a workforce of 800 people, including 400 owner drivers. The business moves more than 13 million individual freight items each year.

Key attractions for Waterman include PBT’s very strong brand, its comprehensive national network, its integrated service offering and its loyal and committed work force. Waterman has previous experience in the wider freight and logistics sector through successful investments in the international forwarding space.

Mr Baker will remain involved with the business as a shareholder and non-executive director. Dave Lovegrove has been appointed as the new CEO of PBT. Mr Lovegrove was previously CEO of Waterman investee Express Logistics, and more recently has worked for Toll in New Zealand and South East Asia. Matt Riley and Jacques Venter will represent Waterman’s interests on the board and will work collaboratively with management and other stakeholders to assist the company in meeting its long-term growth aspirations.

The sector has a robust outlook with New Zealand’s freight task expected to grow by 48% in tonne-kilometres by 2048. PBT is well placed to build upon its comprehensive national network and integrated service offering as it begins a new chapter in its long and successful history. For further information on PBT please go to www.pbt.co.nz

HealthLink Acquired by Global Healthcare Technology Specialist

15 September 2017

Waterman Capital (“Waterman”) today announced that it has sold its 50% shareholding in HealthLink Group Limited (“HealthLink”) to global healthcare technology specialist, Clanwilliam. HealthLink is Australasia’s leading health-system integrator with 13,500 healthcare organisations and professionals exchanging over 100 million electronic messages each year through HealthLink.

Since Waterman’s investment in November 2013, the company has materially increased both revenue and earnings through growth in new customers, increased usage across the unique HealthLink network and the rollout of new services. Particular initiatives during our ownership included:

Development and implementation of a strategic plan to grow the Australian market.

Introduction of agile development methodologies and product-led teams;

“Clanwilliam Group’s investment is clear recognition of the importance of the health-system integrator’s role in integrating information flows within the modern health system. We have a common belief that information technology can be of great benefit to the delivery of healthcare and can best be achieved by connecting information systems, allowing healthcare providers to automate and streamline their existing processes.”

“We are very grateful to Waterman Capital for partnering with us to grow the business over the past five years, their support has been invaluable.”

Clanwilliam is wholly owned by Eli Global Group (“Eli”). Eli is based in the US and employs 5,000 employees worldwide across the following industries: information and media, education and certification, healthcare technology, financial services and insurance.

Waterman Makes Investment In Provincial Education Group

28 August 2017

In August 2017, Waterman Capital announced that it had acquired a majority stake in Provincial Childcare Education Group (Provincial) alongside founders Andrew and Katie Phillipps, and experienced Australian childcare investor Chris Giufre. Andrew and Katie will continue to manage Provincial on a day to day basis and will be joined on the board by Chris Giufre, Matt Riley and Jacques Venter.

Provincial operates 40 childcare centres clustered across New Zealand and is the fourth largest operator of childcare centres in New Zealand, with a total of over 2,700 licensed places. The core values of Provincial are to put parents and children first. It aims to promote passion, professionalism, and family values across all of Provincial’s centres to bring out the best in children and develop their capabilities in readiness for primary school.

There are approximately 2,500 childcare centres in New Zealand and the large majority are independently owned and operated. Waterman has invested to support three highly capable industry experts in expanding Provincial’s national footprint as it continues to acquire and improve further childcare centres.

My Food Bag bags bigger base

Home food delivery provider My Food Bag has relocated to a new building in Parnell to cater for rapid growth that has seen the company more than treble the size of its Auckland premises.

The company has consolidated its office and development kitchen operations from two separate locations at 280 and 283-285 Parnell Rd. which total about 550sq m; and has moved into two freshly fitted-out floors totalling around 1627sq m at 56 Parnell Rd.

A nine-year year lease, negotiated by Ben Wallace of Bayleys Auckland, encompasses 533sq m of ground floor kitchen, showroom and office space; and 1094sqm of third floor offices and 32 basement car parks.

"My Food Bag had some very specific and unique requirements which meant that standard office floors weren't necessarily going to suit their needs," says Wallace. "Fortunately, we were able to identify a building close to their existing premises which aligned with those requirements as well as providing flexibility for future growth.

"We also had a forward-thinking landlord willing to countenance a complete retrofit to accommodate a high-profile tenant with impressive aspirations. We then partnered My Food Bag with interior designers and project managers Platform Consulting Ltd - who we knew could deliver a funky, individualised fit-out that reflected My Food Bag's corporate culture.

"Their two levels of space underwent a complete refurbishment to provide a stunning modern character working environment complete with polished concrete floors, exposed ceiling services, new lighting and plenty of functionality."

My Food Bag founder and co-CEO Cecilia Robinson says the new premises will enable the company to become even more innovative. A standout feature is the development kitchen which takes up the majority of the ground floor space.

"A big part of our success lies in the work our chefs put in to the development and testing of ingredients and recipes for all our offerings and this is reflected in the space that has been allocated to this vital part of the business. The new development kitchen gives our team the ability to innovate in accordance with Nadia Lim's 'nude food' philosophy to deliver exciting new offerings to our customers."

The number of cooking stations has been increased from three in the old premises to 10, and these are fully decked out with the latest state-of-the-art Fisher & Paykel appliances plus a "living wall" including herbs that are used in recipes.

In another innovation, a two-station photography kitchen has been installed where each dish that makes its way through a stringent evaluation process undergoes a photography shoot for use on recipe cards and other marketing collateral. Completing the development kitchen is a large pantry and chiller where ingredients are held.

The "back end" of the business is located on Level 3 which has also been completely reconfigured to accommodate My Food Bag's operations, procurement, finance, marketing, digital and customer love teams.

This is mostly open plan space but with break out rooms that carry the "middle" name of the founders of the business, Cecilia and James Robinson, Theresa Gattung and celebrity chef Nadia Lim and her husband Carlos Bagrie. Each staff member adopts a food ingredient as their My Food Bag middle name.

Kevin Roberts joined the team as a shareholder and chair in 2015 and the board room on Level 3 is called Rhubarb after the name he chose.

The third level also has a substantial central raised platform area which serves as a staff kitchen and gathering place and has expansive views over Fraser Park towards the Sky Tower and CBD.

Wallace says the level's floor-to-ceiling glazing means it benefits from plenty of natural light to help create a lively and bright working environment.

My Food Bag began operations in 2013, offering a service where customers ordered online and received food bags containing recipes for a week's main dinner meals. In mid-2016, it expanded its offering with the launch of the Bargain Box brand and recently launched Fresh Start with Nadia, a new product range designed specifically for people wanting to manage their weight. The company now delivers more than one million meals to New Zealanders each month.

In October 2016, My Food Bag announced it had secured investment from Waterman Capital to support its ambition to list on the New Zealand Stock Exchange within the next three years to raise further capital.

Waterman Capital Repeats Win of Private Equity Deal of the Year Award

The 2016 New Zealand Private Equity and Venture Capital Association (NZVCA) Deal of the Year Award has gone to Waterman Capital for its investment in Academic Colleges Group.

The NZVCA Deal of the Year Award recognises outstanding performance in the private equity industry and was announced at the NZVCA 2016 annual conference in Queenstown today (20 October).

NZVCA Executive Director Colin McKinnon says: `Waterman Capital’s investment in Academic Colleges Group is an example of innovation, growth, and excellent returns on investment that benefited all stakeholders. Through the period of Waterman’s investment revenue and earnings more than doubled through a combination of organic and acquisition growth.’

Entries were judged on return to investors and the company's financial performance. The company's contribution to the economy, employment, innovation, consistency and industry competitiveness were also taken into account.

Mr McKinnon adds: ‘the winner of our 2016 award is an example of the purpose and aim of private equity: to partner with management and other shareholders to improve growth and performance, through the sharing of expertise and provision of capital. This ultimately delivers improved productivity, creates jobs and contributes to the national economy.’

Academic Colleges group owns and operates fifteen preschools, schools and tertiary colleges in New Zealand; one in Vietnam and one in Indonesia. It is the largest private school operator in New Zealand and has more than 12,000 students and 1,000 staff.

Waterman invested in Academic Colleges Group in early 2013 and worked with management to execute a number of growth initiatives that included:

The opening of a new school in Tauranga, ACG Tauranga;

Acquisition of the ACG Strathallan College operating entity;

The merger of ACG’s two existing schools in Vietnam creating a high level of revenue and cost synergies;

A significant push into the vocational space, with the establishment of the ACG Tertiary and Careers division, comprised of four separate acquisitions of leading tertiary businesses.

Established in 2004, Waterman Capital is one of New Zealand’s most experienced private equity players. It is currently investing its third fund Waterman Fund 3 LP, a $200 million fund established to invest in mid-market New Zealand companies. Waterman sees its role as channelling both capital and skills to exciting businesses like Academic Colleges Group that exhibit strong potential for growth.

Recent investments by Waterman include:

My Food Bag – NZ’s leading home food delivery provider;

Manuka Health – one of NZ’s largest natural health and manuka honey companies;

Healthcare Holdings –largest private hospital operator in Auckland;

Partners Life – fastest growing NZ Life insurer; and

HealthLink Group the largest provider of clinical messaging services in Australasia.

My Food Bag takes important step toward future growth

19 October 2016

Market leading home food delivery provider, My Food Bag (MFB), today announced that it had successfully secured investment from Waterman Capital. This partnership will support the company in achieving its growth ambitions, with aspirations to seek public capital within the next three years to further fund its development.

MFB was established to resolve the dilemma, “what are we having for dinner tonight?”, and now delivers more than one million meals to New Zealanders each month. In an environment where people are increasingly time-poor and health conscious, MFB sees further opportunities to grow whilst making a positive change in the lives of New Zealanders. Waterman describes the business as a tremendous New Zealand success story.

Founder & co-CEO Cecilia Robinson says the directors are very pleased to have Waterman Capital as part of the team for the next evolution of My Food Bag’s growth and development.

For the My Food Bag team it’s very much business as usual, with celebrity chef and co-founder Nadia Lim’s role remaining unchanged as the company’s brand ambassador and food expert. Cecilia and James Robinson will continue in their roles as co-CEOs to lead the company through this next phase of growth.

Waterman Capital takes three seats on the board filled by Chris Marshall, Lance Jenkins and Phil Maud. Kevin Roberts continues to chair the company and Theresa Gattung will also remain as a director. Robinson says “when we announced our intention to capital raise we were flooded by customers wanting to invest in the company. As we have now set our sights on future growth and a possible IPO, we are thrilled to give kiwis an opportunity to become shareholders”.

Local investor, Waterman Capital was founded in 2004 to provide long-term capital and complementary skills to New Zealand businesses. Waterman is considered the ideal partner to provide the expertise to accelerate My Food Bag’s growth as the company prepares for the public markets, Robinson adds.

Waterman Capital spokesperson Chris Marshall says that, as a New Zealand investment group, Waterman’s resources will be applied to extending the My Food Bag success story. “Waterman has a long track record of investing in and adding value to private businesses in New Zealand. These companies are the life blood of the domestic economy. We have been very impressed with the MFB team and what they have created. What they can do going forward is very exciting and we are looking forward to sharing in that journey over the next five years and beyond.”

In May 2016, the company announced it was seeking expressions of interest from equity investors as it reviewed its capital structure. With strong local and international interest, Robinson says the shareholders are pleased that in Waterman, full company ownership remains in Kiwi hands.

“My Food Bag has rapidly grown to become a household name. This partnership reflects the next step in the maturity of the business and it is our intention that our foodies are going to be able to buy a stake in the business in the future” Robinson notes.

Waterman Fund 3 LP completes $200 million capital raising

17 March 2016

Waterman is pleased to announce that it has successfully completed its capital raising for Fund 3, closing the fund at its hard cap of $200,000,000.

The Fund was significantly oversubscribed having received strong support from both existing and new investors. The investors in Fund 3 include family offices, eligible individuals, community trusts, iwi and institutional investors.

Our investment thesis is to ‘create superior returns through active involvement in privately owned New Zealand companies’, and the investment focus for Fund 3 is consistent with prior funds. This investment philosophy is as relevant today as it was when Waterman was established in 2004.

Waterman Capital Launches Fund 3

1 February 2016

Waterman Capital is pleased to announce the launch of its third private equity fund, Waterman Fund 3 LP. Waterman was established in 2004 and has been successfully investing in privately held New Zealand companies for more than a decade.

Like its predecessors, Fund 3 will continue to provide capital and skills to assist private, New Zealand based businesses achieve their growth aspirations. These companies form the heart of the New Zealand economy and have significant growth potential but are often constrained by a lack of capital and resources.

Fund 3 is targeting commitments of $150 million and has been strongly supported by returning investors. It will focus on expansion and replacement capital, and management buy-out transactions. In all instances Waterman seeks to partner with management and other shareholders for mutual benefit.

In September 2015 Waterman announced the divestment of its interests in leading Manuka honey producer and exporter Manuka Health New Zealand Limited. The same month it announced the sale of its interests in Academic Colleges Group New Zealand’s largest private education provider. Both businesses had experienced very significant growth over the period of Waterman’s investment. Waterman continues to work closely with the management and other shareholders of its remaining portfolio investments.

Waterman Capital Wins Private Equity Deal of the Year Award

22 October 2015

The 2015 New Zealand Private Equity and Venture Capital Association (NZVCA) Deal of the Year Award has gone to Waterman Capital for its investment in Manuka Health.

The NZVCA Deal of the Year Award recognises outstanding performance in the private equity industry and was announced at the NZVCA 2015 annual conference in Queenstown today (22 October).

NZVCA Executive Director Colin McKinnon says: `The Waterman Capital investment in Manuka Health is an example of innovation, growth, and excellent returns on investment that benefit investors. Through the period of Waterman’s ownership revenue grew from $17m in 2012 to approximately $70m in the current year.’

Entries were judged on return to investors and the company's financial performance. The company's contribution to the economy, employment, innovation, consistency and industry competitiveness was also taken into account.

Mr McKinnon adds: ‘the winner of our 2015 award is an example of the purpose and aim of private equity: to partner with companies to improve growth and performance, to share expertise and capital. This ultimately delivers improved productivity, creates jobs and contributes to the national economy.’

Manuka Health is the second largest producer and exporter of Manuka honey related products in New Zealand and has demonstrated extraordinary year on year growth since its inception in 2006.

Waterman invested in Manuka Health in 2012 providing expansion capital to fund a number of growth initiatives. During this period the company:

constructed a $10m, state of the art, processing facility in Te Awamutu which tripled production capabilities;

quadrupled staff numbers including a number of senior appointments;

made significant advancements to secure further supply of the key raw ingredients, manuka and propolis;

invested significantly in research and development to support products with scientific health claims and protect relevant intellectual property; and,

played a central role in introducing industry regulation which will benefit Manuka Health and the wider honey sector.

Established in 2004, Waterman Capital is one of New Zealand’s most experienced private equity players. It manages a series of funds that channel capital and skills to private companies like Manuka Health. Other investments include New Zealand’s largest education business Academic Colleges Group, and Healthcare Holdings (Mercy Ascot), operator of the largest private hospitals in Auckland.

Academic Colleges Group Sale Delivers Strong Result

16 September 2015

Waterman Capital (“Waterman”) today announced that it had, together with other shareholders, entered into a contract to procure the sale of 100% of the shares in Academic Colleges Group Limited (“ACG”). ACG is New Zealand’s leading and largest private education provider and has ambitious growth plans for the future.

Founded in 1995 by Sir John Graham (ex-Auckland Grammar School headmaster) and Dawn Jones (ex-Diocesan School principal) ACG is best known for its private schools in Auckland, which provide students with a world-class academic education in an environment where achievement and excellence is celebrated. The Group also operates international schools in Vietnam and Indonesia, while in New Zealand it provides tertiary & careers training, early childhood education, English language and university foundation courses.

ACG provides education and training to over 10,000 students per year, enabling each of those individuals to pursue their chosen pathway to further education or employment.

Waterman invested in ACG in January 2013. During the period of our ownership, ACG more than doubled revenue and earnings through a combination of organic and acquisition growth. Particular growth initiatives during the period of our investment included:

The opening of a new school in Tauranga, ACG Tauranga;

Acquisition of the ACG Strathallan College operating entity;

The merger of ACG’s two existing schools in Vietnam creating a high level of revenue and cost synergies;

A significant push into the vocational space, with the establishment of the ACG Tertiary and Careers division, comprised of four separate acquisitions of leading tertiary businesses.

The transaction is subject to OIO approval and various other market standard conditions.

We are very pleased with the outcome for our investors and believe the company is well positioned as it moves to the next stage of its lifecycle.

Manuka Health Sold Following Period of Extraordinary Growth

11 September 2015

Waterman Capital (“Waterman”) today announced that it had, together with other shareholders, sold 100% of the shares in Manuka Health New Zealand Limited (“Manuka Health”) for an undisclosed sum. Manuka Health is the second largest producer and exporter of Manuka honey related products in New Zealand and has demonstrated extraordinary year on year growth since its inception in 2006.

Waterman Director, and Director of Manuka Health, Chris Marshall commented that: “We are very pleased with the outcome of our Manuka Health investment. The company has grown at an extraordinary pace and delivered an outstanding return to our investors. We are similarly pleased that our skills and capital have been of assistance in achieving such a satisfying outcome.”

Waterman invested in Manuka Health in 2012 providing expansion capital to fund a number of growth initiatives. During this period the company:

Constructed a $10m, state of the art, processing facility in Te Awamutu which tripled production capabilities;

Quadrupled staff numbers including a number of senior appointments;

Made significant advancements to secure further supply of the key raw ingredients, manuka and propolis;

Invested significantly in research and development to support products with scientific health claims and protect relevant intellectual property;

Played a central role in introducing industry regulation which will benefit Manuka Health and the wider honey sector.

Through the period of Waterman’s ownership revenue grew from $17m in 2012 to approximately $70m in the current year.

We are very pleased with the outcome for our investors and believe the company has been well positioned as is moves to the next stage of its lifecycle.

NZ Herald - KiwiSaver should spread net privately

Michael Cullen, the architect of KiwiSaver, wrote at the time of its launch in 2007 "that KiwiSaver would help us own more of our New Zealand businesses and that it would produce deeper capital markets to provide the oil for a well-functioning business sector".

I applauded that statement at the time as I saw KiwiSaver creating a pool of savings that would lead to investment in great New Zealand companies, both public and private.

Over the past eight years we have seen part of those savings flow into listed New Zealand public companies, but little (if any) of those KiwiSaver funds have provided "oil" for New Zealand's private business sector.

We are unique in New Zealand in that the ratio of private to public companies is far higher than in most other developed nations. We are, in essence, the land of private business. A lack of capital flowing into New Zealand private companies therefore misses a large and important part of the overall economy.

These private companies, however, have the same need for investment and capital as public companies. To enable our private companies to grow, we need to provide them with the capital to help execute on their growth plans.

A number of New Zealand institutional investors have recognised this private market opportunity and have channelled capital to private companies by investing through New Zealand private equity fund managers or, on occasion, by investing directly.

By way of example, Waterman Capital has received investment from the New Zealand Superannuation Fund and Accident Compensation Corporation amongst others, with a mandate to provide capital and skills to help grow New Zealand's private businesses.

Recently, we have also seen a number of local community trusts, iwi groups and others allocate part of their investment portfolios to New Zealand private equity.

It's an attractive investment class for those investors with longer term investment horizons. Research shows that historical returns to private equity are materially higher than the returns of the equity market.

For KiwiSaver, as a long-term retirement savings vehicle, the fact you need to be patient for strong returns seems like a natural fit.

KiwiSaver providers need to consider giving savers access to an asset class that historically has delivered strong returns over time. If the asset class is attractive enough for our crown investment entities, for community trusts and iwi - why aren't KiwiSaver providers also embracing New Zealand private markets?

John Berry of Pathfinder Asset Management recently wrote an article on KiwiSaver and private equity and while he supported the investment class, he pointed out three key hurdles that a KiwiSaver provider may highlight which I think are worth addressing:

A lack of asset liquidity. It's true that private equity is a long-term asset class, but so is KiwiSaver. For KiwiSavers who have 10 or 20 years of contributions ahead of them, given the historical returns, this is an asset class that should be highly attractive to them.

No daily asset valuation makes it difficult for KiwiSaver providers to mark these assets to market. Private equity funds tend to revalue their assets every three to six months, so yes, it's not daily, but again let's look at what KiwiSaver is. It's a long-term investment class, and therefore should we really be concerned that part of the investment portfolio is not being priced daily? It's what a KiwiSaver has in his or her fund on turning 65 that matters, not daily asset valuations when they are 20 years away from retiring.

Fee structure. Fees are sometimes highlighted as an issue. Firstly, as an investor in any asset class it's net returns that matter (that is, after all fees are paid). The returns that are reported are after fee returns and it's these returns that have been impressive, in some cases almost twice those of equity markets.

Secondly, fees for private equity firms are in the main performance based. Unless investors are making a return, private equity fund managers aren't receiving a large part of those fees. That alignment of interest between investors and private equity fund managers is a key attraction to investment.

Finally, managing a private investment requires a far greater hands-on role than managing other investment classes. Investing in private businesses requires an active management role, not merely a passive one. It is this contribution of skills and help to private businesses that helps drives the superior returns to investors.

In my opinion these hurdles for KiwiSaver providers can all be positively addressed.

KiwiSaver has been a wonderful development for New Zealand and for its capital markets. As this pool of savings flows through to New Zealand business we all benefit from the jobs created and from the economic growth that flows from this.

But as KiwiSavers we are currently investing in only the publicly listed part of the economy. Private businesses, as an important and large part of our economy, also need some of the "oil" that Cullen envisioned at the launch of KiwiSaver.

Private equity, or private company investing, can provide outstanding returns for investors who can be patient. For KiwiSavers who are committed to investing to fund their retirement, private equity is an important option that should be available to them. Eight years on, it's time for KiwiSaver providers to consider alternatives.

HealthLink's new e-form gets buy-in from GP's

23 July 2015

400,000 paper-based Work Capacity medical certificates are received each year by the Ministry of Social Development. Last year, New Zealand based e-health business, HealthLink won the tender to automate this time-consuming process. HealthLink has developed a solution using their “e-forms” platform which is the culmination of providing electronic integration solutions to the NZ health sector for over 20 years.

HealthLink CEO, Tom Bowden says “a key success factor of the recent launch is the fact that GPs are already widely using another of HealthLink e-forms solutions to refer patients to hospitals, meaning they are already familiar with the technology”.

Health Minister Dr Jonathan Coleman and Social Development Minister Anne Tolley say GPs can now lodge work capacity medical certificates electronically, replacing time-consuming paper certificates. “Work capacity medical certificates contain information about a person’s medical condition, capacity for work, how long they are expected to be unable to work and their ability to undertake work related activities. This change reduces administration for GPs and the number of visits beneficiaries need to make to Work and Income as they will no longer have to deliver their medical certificate in person.”

Health Minister Dr Jonathan Coleman said, “it is important for patients that this information is passed from the GP to the Ministry of Social Development as quickly and accurately as possible”.

“These certificates can now seamlessly be sent from the doctor’s office to MSD,” Mrs Tolley says. “This is a great example of the health and social welfare sectors working together to make dealing with government simpler and less time consuming. This reflects our focus on increasing online interactions with government, as part of the Government’s Better Public Service targets.”

Since it was launched about a month ago, some 600 general practices have already sent out electronic Work Capacity medical certificates. At a rate of 760 eForms sent to MSD each day, this solution is already on track to automate over 200,000 previously-manual certificates per year.

Partners Life named Insurance Provider of the Year

26 June 2015

Partners Life has been named the Insurance Provider of the Year at the PAA Excellence Awards for the second time in the company’s four-year history.

Partners Life managing director Naomi Ballantyne says to receive the award twice in three years is profoundly gratifying for her company and its partners.

PAA board member Geoff Peterson says the nod to Partners Life is a true reflection of advisers’ view of the company’s service to the industry. “It’s voted on by our members, who are advisers in the New Zealand market who are selecting the provider they believe is offering the best solutions for their customers. The insurers who have received this award historically are those who appreciate that the best advisers are focused on what each customer needs rather than loyalty to a particular company.”

This latest recognition of Partners Life follows a 5-star rating for the company in the annual Beaton Survey of Independent Advisers last year. The 2014 survey marked the fourth year in a row the company received a 5-star rating (the only such rating that year), and Partners Life scored an overall satisfaction rating of 85%, up from its 2013 rating of 82% and compared with an industry average of 71%.

NZ Herald - Private equity investing offers rich return

17 April 2015

Lance Jenkins: Private equity investing offers rich return

Capital and support important given the large proportion of unlisted firms in NZ, writes Lance Jenkins.

As a private equity (private company) investor there are three questions I regularly get asked - what is private equity? Do we need private equity in New Zealand? And for an investor, how does it actually work?

What is it?

Private equity simply means the investment of equity capital in companies which are not listed on a public stock exchange.

Private equity investors, however, provide more than just capital, they also support a company's management team in developing and executing growth strategies over an extended period of time. We are, in essence, long-term investors and partners in private businesses.

Before any investment is made, private equity investors spend a large amount of time upfront working with management and owners to understand what they do, the industry dynamics and how value can be created for all partners.

Every investment made is based on a belief in the management team and a clear understanding of how our complementary skills can help them deliver on and execute their growth plans.

Research published last year by GE identified about 34,000 "mid-market" private businesses in New Zealand. Over two-thirds of these businesses saw growth as a key area of focus, but they also identified two hurdles to achieving and implementing those growth plans.

Succession planning, or having the capital to buy out retiring owners, before taking the business to its next stage of growth, was seen as a hurdle.

I would add to this hurdle that access to equity growth capital in general can be an issue for private companies. But regardless of whether a business is dealing with a succession issue, or looking for new equity to fund a growth opportunity, equity capital matters for private businesses. Private company investors such as Waterman Capital fill this need in the marketplace.

Another issue highlighted by a number of those companies was a concern that they may not have the internal resource or capability to execute on their growth plans.

Private equity investors offer "hands on help" to a company in complementary areas such as acquisitions and strategic planning which are clearly important to a growing business.

A key focus for us at Waterman is to work closely with the companies we are invested in. Unlike a public company investor, we can't just sell our shares in an open market.

We are partnering with management and owners to achieve the common goals of growth and value creation. Through equity investment, we share an alignment of interests that goes to the heart of success in private equity investing.

As partners, our job is to contribute to what a business is doing, in a supportive and value adding way. In addition to providing capital, we become another resource to help grow and develop the business.

Do we need private equity in NZ?

There are two perspectives to this question. Firstly the private company's perspective looking for capital and value add, and secondly from the perspective of the investor, who is looking at private equity as an investment opportunity.

In New Zealand, private equity has an important role to play in providing both equity capital and hands on help. The important point is that here in New Zealand we are different, because private companies make up a larger proportion of our economic and business landscape than in most other developed countries.

While the NZX has done a laudable job attracting quality companies to list, there is still a large under- representation of New Zealand's underlying economy in the public markets. It is for that reason that private companies matter more here in New Zealand than elsewhere and why private equity has a large role to play.

We are fortunate that our two largest institutions, the New Zealand Superannuation Fund and the Accident Compensation Corporation, have recognised both the need for capital in the private company space and the higher returns available to investors.

They have invested in NZ private equity and this funding allows firms such as Waterman to provide growth and succession capital to our private companies.

Having local private equity funds also gives New Zealanders the ability to invest in an asset class that is often difficult to access. For investors with longer time frames, it can be a rewarding experience.

The Australian/New Zealand returns data from industry benchmarking specialists Cambridge recently highlighted that over a 10- year period, private equity funds gave investors (on average) a return of 12.3 per cent per year, versus the NZX and ASX equivalents at 7.2 per cent and 6.6 per cent respectively. Interestingly, if you backed a private equity manager that ranked in the top half of its peers, then the return would have been over 26 per cent per year, or almost four times the listed market equivalent.

So how does it work for investors?

One of the unique aspects of investing in private equity funds is the "commitment" nature of the investment. Unlike buying shares, where you invest $10,000 in a company and pay the $10,000 at the time of purchase, when you invest in a private equity fund you make a commitment to that fund.

That commitment is called down (a "call" is a request for payment) over time by the manager as required, primarily when it finds a business to invest into.

By way of example, if you made a $10,000 commitment and the fund invested that money evenly over the next five years, you would be asked to put in about $2000 a year to fund that commitment.

As the 10-year Cambridge data highlighted, with private equity returns at almost twice that of publicly listed equities, it can be a very rewarding experience for investors.

So in summary, to answer our three questions.

Private equity exists to fulfil a need for both the equity capital required and the hands-on help needed in executing the growth plans of private companies.

This need is particularly relevant in a New Zealand context given the importance and dominance of private companies.

And finally, for investors with longer time frames, the returns can well be worth the wait.

Manuka Health recognised for excellence in International Business Awards

20 January 2015

Manuka Health has been recognised as a finalist in the 2015 New Zealand International Business Awards (NZIBA) in the $10 - $50 million General Award Category. The award nomination reflects the growth experienced by Manuka Health over the past eight years and is also an acknowledgement of recent investment in a multi-million dollar plant in Te Awamutu.

Opened officially in November 2014, the Manuka Health facility is a high tech, internationally accredited laboratory, honey processing factory and global distribution centre which enables the Company to produce award-winning innovative natural healthcare products.

“We are honoured to have been recognised for our success in international business,” says Kerry Paul, CEO Manuka Health. “This comes on top of an exciting year with the opening of our world-class facility and a prestigious Gold Innovation Award for our ManukaClear™ Intensive BB Gel in the USA.”

Waterman Sells Guthrie Bowron

5 December 2014

Waterman is pleased to announce the sale of the Guthrie Bowron business. Following a number of approaches to acquire the business a transaction has been completed with private interests, associated with key management of the company. The business has been owned by Waterman for nine years and has delivered an excellent return to investors.

By way of background, Waterman (Fund 1) acquired 100% of the Guthrie Bowron business in May 2005. Due to its proud history the Guthrie Bowron brand had high awareness and the business held a meaningful market position in its key categories of paint and wallpaper.

The investment thesis supporting the acquisition was to leverage the platform that already existed and extend the product offering into other home decorating categories. A key attraction for us was the high conversion of earnings to cash flow which allowed the company to distribute regular dividends and underpinned the return on investment.

Following acquisition, Waterman repositioned the business as a home decorating specialist. This involved a complete rebranding and new marketing strategy. That was followed by the introduction of curtains to the group and later flooring products. Guthrie Bowron is now one of the top three made to measure curtain and blind retailers in New Zealand and flooring will represent approximately 20% of group sales this financial year.

Since our investment in 2005 the business has grown well. Earnings have doubled and the company has delivered regular dividends in line with our investment thesis. It is worth noting that this period includes the Global Financial Crisis which had a significant adverse impact on the home improvement sector.

We believe the business is now well positioned for another owner to take it to the next stage.

Academic Colleges Group acquires New Zealand Management Academies

28 October 2014

On 1st October Academic Colleges Group (ACG) announced its acquisition of New Zealand Management Academies Limited (NZMA).

Founded in 1985, NZMA is a large, well-established, Category 1 private tertiary education provider. It has campuses at Sylvia Park and Otahuhu in Auckland, a campus in Hamilton and serves around 3,000 domestic and international students. NZMA provides programmes from Levels 2 to 7 in hospitality, cookery, business studies, contact centre operations, retail and construction.

CEO of ACG Ian King said “I am delighted that ACG will provide more options within the tertiary and careers sector and do more to train young people for further study or direct transition into the work force. ACG has a close interest in business, cookery and hospitality, IT, art and design”.

“NZMA is a leader in its sector of the market, and is helping to lift educational outcomes for its communities, something ACG is very focused on,” said Ian. “We are pleased to have NZMA join ACG along ACG Yoobee School of Design and New Zealand Career College (NZCC). Our vision for a comprehensive tertiary and careers division offering a wide range of qualifications and pathways to the workforce is now a reality.”

ACG’s Divisional Chief Executive of the ACG Tertiary and Careers Division, Feroz Ali, said NZMA represented a significant addition to the Group’s tertiary and careers capability.

Academic Colleges Group Acquires NZ Careers College

18 August 2014

On 1st August ACG announced its acquisition of NZ Career College (NZCC).

NZCC has been providing a range of certificate and diploma courses in Early Childhood, Health, Business, English and Electronic Trades since 2002.

NZCC operates five campuses across Auckland, Wellington and Christchurch and employs around 70 staff. It attracts 700 domestic and international students a year.

The founder of NZCC Mr Feroz Ali will take up a senior role with ACG as Divisional Chief Executive of the ACG Tertiary and Careers Division.

Major milestones achieved by Partners Life

28 July 2014

Partners Life, New Zealand’s fastest growing life insurer, has achieved two major milestones recently with a significantly oversubscribed capital raising and the accumulation of $100m in in-force annual premiums.

“It is just over three years since we opened for business and, in a market dominated by well-resourced and long-established foreign-owned life companies, we have created a very substantial and competitive New Zealand company,” says Partners Life Managing Director Naomi Ballantyne.

“The record of our management team in the industry and the quality of our products and service has seen us win and sustain strong support from independent advisers. Add to that the high level of under-insurance in the New Zealand market and it is clear that there are plenty of opportunities for sustained growth.”

The capital raising attracted such strong interest that the amount raised of $31.6m, was well in excess of the target minimum of $20m. Existing investors (including Waterman) all supported the raising.

“Investors have been attracted to the combination of our experienced leadership team, our proven track record of sustained growth, and the market potential available to us.”

The funds raised further strengthen Partners Life’s capital position. They will be used to support continued business growth through the provision of exceptional consumer product and service offerings.

Healthcare Holdings Limited Acquires New Zealand Radiology Group

11 April 2014

Healthcare Holdings Limited (HHL) has increased its stake in New Zealand Radiology Group (NZRG) to 100%, after acquiring the remaining 51% that it did not already own from Sonic Healthcare Limited.

NZRG is the third largest radiology service provider in the Auckland region. The company operates under the Mercy Radiology brand and has eight locations, which offer MRI, CT, ultrasound, mammography, x-ray, biopsies, PET-CT, bone density, fluoroscopy and angiography services.

HHL is familiar with the business having been a shareholder for a number of years. The radiology sector has experienced strong growth recently, particularly in the Auckland region, where a growing and ageing population have increased demand for digital imaging services. NZRG has recently settled on an acquisition in the north of Auckland which is highly complementary to its other locations in the region.

Academic Colleges Group Acquires Yoobee School Of Design

14 March 2014

On 28th February ACG announced its acquisition of the Yoobee School of Design from listed company Renaissance Corporation (RNS).

The Yoobee School of Design is New Zealand's largest specialist private tertiary provider of creative digital technology courses and related resources. Established in 1997, it has campuses in Auckland, Wellington and Christchurch which offer certificate and diploma courses, short courses for the community, primary and secondary school students and teachers.

ACG sees significant opportunity available through extension into the tertiary sector. The digital space is of particular interest as it resonates strongly with both domestic and international students. ACG has a strong history in arts and design so the progression to digital creativity is logical and highly complementary.

HealthLink is an information technology company whose products enable health care practitioners, medical organisations and other health sector stakeholders (e.g. ACC and the Ministry of Health) to communicate electronically and securely share medical information with each other. HealthLink is the largest player in the New Zealand and Australian markets.

HealthLink’s customer base includes over 30,000 medical professionals operating out of 10,000 sites and it is estimated that HealthLink’s system exchanges 60 million pieces of clinical information each year, removing approximately 50 million items of paper from the New Zealand health system.

The Business is headquartered in Newmarket, Auckland and also has an office in New South Wales, Australia. A pilot study is being conducted in British Columbia, Canada.

Attractive industry: global demand for healthcare in developed countries is increasing at rates significantly faster than GDP growth and health systems are under pressure to reduce costs and become more efficient.

Strong market position: HealthLink is the largest player in the New Zealand and Australian markets and barriers to entry are high. HealthLink’s wide market footprint provides a launching pad for new products.

Highly trusted brand and value added service offering: HealthLink has a highly trusted brand built up over twenty years and its products provide compelling end user advantages in that they:

Growth opportunities: HealthLink has recently introduced five new online products providing a platform for future growth.

Experienced management team: In Tom Bowden, Graeme Stretch and Dr. Geoffrey Sayer, a highly experienced management team is already in place to lead HealthLink through its next phase of growth.

Commentary from HealthLink and Waterman Capital

Tom Bowden (CEO) of HealthLink says “We welcome Waterman Capital as a new shareholder of HealthLink and believe that they are an ideal partner to support us through our next phase of growth. Waterman stood out from other investors because of its strong team and its ability to provide value to our domestic and international growth strategies”.

Chris Marshall (Executive Director) from Waterman comments “New Zealand is a leading international player in the delivery of electronic health messaging and associated online services. HealthLink has been instrumental in driving this success. We are delighted to be partnering with this New Zealand success story and look forward to working closely with Tom Bowden and his team to help HealthLink achieve its well defined strategic goals.”

Partners Life wins "Business of the Year" at Westpac awards night

Partners Life had a successful night at the recent Westpac Auckland North Awards night.

Partners have been awarded the Babcock Excellence in Leadership Award and the Best Medium to Large Business of the Year Award.

Partners Life was also awarded the Westpac Supreme Business of the Year Award for 2013.

Naomi Ballantyne CEO of Partner Life said "It is extremely satisfying to have received this accolade this year when we are still not quite two and a half years old. Our wonderful people are bursting with pride about their company and I am extremely proud of each of them.

We would like to thank you for supporting us - we know that we wouldn't be where we are today without you"

Waterman Invests in Partners Life

23 August 2013

WATERMAN ANNOUNCES INVESTMENT IN NEW ZEALAND LIFE INSURER, PARTNERS LIFE

Waterman Capital is pleased to announce its investment in one of New Zealand's fastest growing life insurance providers, Partners Life (Partners). From establishment almost 3 years ago, Partners has become a substantial business competing and growing strongly in the New Zealand market. As an investor in growth businesses, we are excited about the opportunity of partnering with a strong leadership team, focused on becoming a leading New Zealand life insurer.

Partners Life was founded in 2010 by Naomi Ballantyne (CEO), together with Chris and Richard Coon. Chris and Richard previously founded Sovereign Insurance. Naomi was a founding employee of Sovereign and was the founder/CEO of One Path Insurance (now owned by ANZ). The leadership team has successfully worked together for many years. The Board is chaired by ex Kiwibank CEO, Sam Knowles.

Partners Life offers life insurance (life and income protection related) products to New Zealanders. The company has grown very quickly over the last 3 years to become a substantial competitor in the NZ marketplace. Partners Life distributes its life products through a network of over 1450 independent financial advisors. Its key products include

Life;

Trauma;

Total Permanent Disability;

Key Person (Disability Income); and

Health Insurance.

For further information about Partners Life please go to (www.partnerslife.co.nz).

Background

The background to the Partners Life investment dates back to November 2012 when Waterman identified the company as a possible opportunity and approached the company directly.

Waterman has spent the past nine months reviewing the industry and the last three months specifically engaged with the company. Our conclusion was that this is a highly successful company, with an innovative product set, that was making a real impact in the marketplace.

Waterman concluded its investment in Partners Life on 22nd August, 2013.

Investment Attractions

High growth company - since inception, Partners has been one of the fastest growing life insurance business in NZ.

Management - we are investing alongside a team that has a very successful track record at Sovereign and One Path, and one that has created a substantial business in less than 3 years.

Innovative company - the Group's leadership team has a strong history of producing innovative products for the industry.

Growing distribution force - Partners currently has a network of over 1,450 independent advisors' nationwide and expects to grow this to over 1,600 in the coming financial year.

Attractive industry - the industry itself has attractive growth having achieved over 9% premium growth pa over the last 10 years.

Future investment opportunity - given the capital intensive nature of growing life insurance businesses, Waterman will have the option to participate in future capital raising rounds.

Global partners- since start up, the Group has attracted extensive support, both operationally and financially, from the fifth largest global reinsurer; SCOR. Partners has more recently attracted support from Berkshire Hathaway and Partner Re. These partnerships validate a very successful story.

Commentary from Partners and Waterman Capital

Naomi Ballantyne (CEO) of Partners Life says "We welcome Waterman Capital to the Partners Life shareholder group and we are pleased that Lance will be joining our Board of Directors further enhancing what we consider to be a world-class governance team. This institutional investment by Waterman reflects the significant early success achieved by the business and our expectations of future success".

Lance Jenkins (Executive Director) from Waterman comments "this is a tremendous New Zealand growth story and one that we are privileged and excited to be part of. At Waterman, we are all looking forward to working with Naomi and her team to help Partners achieve its strategic goals".

NZ Herald- Opportunities beyond listed markets

Deservedly the NZ equity market has been getting a lot of attention. Photo / NZ Herald

With recent research highlighting that there are approximately 5000 companies in New Zealand with revenues of $10 million, that suggests a very large pool of companies for funds like ours to partner and provide growth capital to.

The listed markets have been a great place to be invested and depending on who you listen to, the current market provides either a great opportunity to buy or sell, but I guess that's what makes a market.

The NZX returns of 24 per cent over 2012 have been fantastic for investors, especially in the context of a very tough prior five years.

Deservedly the New Zealand equity market has been getting a lot of attention.

From a capital markets perspective, these returns and initial public offerings such as the upcoming Mighty River Power float are some of the best things to have happened to the NZX in over a decade.

They help bring a new generation of investors to consider investment in different asset classes, other than property and bank deposits.

This is a great outcome for companies looking to raise capital as it broadens the investor base willing to consider investment alternatives to property and deposits. But it's not just listed equities that are back in good health.

One of the great performing asset classes has been private equity. These are the funds focused on investing and partnering with private companies.

New Zealand VIF - a fund and research entity that is part of the Crown - recently concluded a study highlighting that funds that invested in private New Zealand companies had returned more than 22 per cent a year consistently on their investments.

This wasn't just a snapshot of one or two companies - the researchers looked at 92 investments made into New Zealand companies by 13 funds over an 18 year period.

To give you a benchmark, that compares to approximately 7 per cent returns, including dividends, for the NZX over that same time period, according to JBWere/Datastream.

That's not bad for an asset class that has fallen under most investors' radars.

Importantly, the research showed, unlike most other investment asset classes, from property to shares, these returns were relatively consistent throughout the economic cycles over that time.

At Waterman Capital - a private company investor - we have a very simple investment thesis. New Zealand is a country where the bulk of our companies and wealth sit in the private markets space.

A common measure used to understand how representative listed markets are to their underlying economies is to compare listed market capitalisation to gross domestic product. For New Zealand that number is approximately 30 per cent versus Australia at 120 per cent.

Just like listed public companies, these private companies have a need for capital. Most can't access the public markets given their size or stage of growth, so firms like ours - made up of local investors - spend time working and partnering with these businesses to help them grow.

In some cases bringing them to the listed markets may happen, but put very simply, we work with these businesses to make what we consider great companies even better.

We provide the expansionary or growth capital, along with our hands-on involvement, to help and support these businesses over time.

Just as importantly we believe that we can achieve great returns for investors, and other stakeholders, by doing this.

Private company investing, or private equity, is an asset class that isn't for every investor, but it should be a consideration for those looking to hold assets over the longer term.

In general when you invest in funds such as Waterman, you make a longer-term commitment to the fund, but with industry returns of 22 per cent a year, it's a trade-off that appropriate investors should consider.

We take our role as guardians of other people's money very seriously and because of that we spend a great deal of time working with companies and understanding them before we partner with them.

With recent research highlighting that there are about 5000 companies in New Zealand with revenues of $10 million, that suggests a very large pool of companies for funds like ours to partner and provide growth capital to.

I would encourage investors, and companies looking for capital, to think of funds like Waterman when they review their options for investment.

Twenty-two per cent returns, as the advertisement used to say - it's gotta be good for you.

Lance Jenkins is an executive director of Waterman Capital.

Waterman invests in Academic Colleges Group

Waterman Capital is pleased to announce its investment in one of New Zealand's leading education providers, Academic Colleges Group (ACG). ACG is the largest private school operator in New Zealand and also operates schools in both Vietnam and Indonesia. Waterman will hold a cornerstone shareholding of 24% and Executive Director Matt Riley has joined the board.

About Academic Colleges Group

ACG operates four private schools (ACG Parnell College, ACG Senior College, ACG Strathallan and ACG Sunderland) and three international colleges in Auckland, as well as two private schools in the emerging markets of Vietnam and Indonesia. It is the largest private school operator in New Zealand and has more than 4,500 students enrolled in its nine schools.

ACG offers a variety of educational programmes, from Preschool and Kindergarten through to Primary, Middle and Senior School. ACG schools offer the University of Cambridge International Examinations (CIE), which are accepted by universities in over 160 different countries, as well as the International Baccalaureate educational programmes in certain schools. ACG is the exclusive provider of The University of Auckland's and AUT University's Foundation Studies courses and also delivers intensive academic English courses with IELTS Preparation. International Students from over 40 countries are currently enrolled in ACG programmes.

Academic Colleges Group Executive Chairman Ian King says, "Waterman brings capital and expertise to assist ACG through an important period in the company's lifecycle. We have great ambitions for our students and for the business. This will certainly help us in achieving them."

Executive director of Waterman Capital, Matt Riley says, "New Zealand has a strong international reputation for the quality of its educational systems and standards. ACG has consistently delivered excellent academic results and that has positioned it as a market leader both here and abroad. We are delighted to be partnering with this New Zealand success story and look forward to working closely with management and shareholders in the furtherance of successful outcomes for all stakeholders."

Investment Attractions

Waterman was attracted to ACG for a number of reasons including:

ACG is the largest private school operator in New Zealand with 1 in 10 private pupils attending an ACG school;

ACG has a strong brand and a track record of delivering academic excellence in a country internationally recognised for the quality of its education system;

The company has a strong core in New Zealand with an exciting platform for growth in the emerging markets of Vietnam and Indonesia;

There are high barriers to entry in the education sector, particularly around the levels of capital required to establish new schools and the consistent achievement of academic excellence;

ACG's management team has a proven track record and has successfully built the company up from a single school 18 years ago to secure its market leading position today.

For further information about ACG please go to (www.acgedu.com).

Manuka Health wins entrepreneurs challenge

1 November 2012

Waterman portfolio company, Manuka Health, has recently been announced as one of three winners in this year's University of Auckland Business School Entrepreneurs' Challenge with the award coming on the back of yet another strong year of sales and earnings growth by the Company.

Now in its fourth year, the Entrepreneurs' Challenge was founded with the aim of supporting the export growth of value-add products. Previous winners of the Challenge include companies such as Allpress Espresso and Jucy Group.

Manuka Health's CEO Kerry Paul says "he is delighted for the Company to have been selected after a very rigorous due diligence process and against very strong competition."

Manuka Health will apply the funds received from winning the award towards clinical trials to continue to explore and validate the health and medical properties of its natural health products, allowing the Company to move with even greater confidence into its next growth phase.

Waterman Capital invested in Manuka Health in April 2012 to assist the Company to continue its rapid, export-led expansion.

Manuka Health is a leader in the commercialisation of science-based biotechnologies for human healthcare applications and has a strong focus on research and development. It utilises the unique healing properties of manuka honey and other bio actives from New Zealand native flora and fauna (e.g. the green-lipped mussel), to produce and sell some 80 functional foods, dietary supplements and wound-care products.

The Company exports to 45 countries, where its product is sold through pharmacies, health food stores and department stores.

Growth in the health and nutrition sector continues to be supported by a number of compelling global trends such as an ageing population, growing pressure on public health systems in the face of escalating demand, and increasing consumer awareness of health issues and the qualities of natural versus synthetic health products.

Waterman Invests in Manuka Health

18 May 2012

Waterman Capital has today confirmed it has invested to support the further growth of natural healthcare success story Manuka Health New Zealand Limited (Manuka Health). Waterman Capital will hold a cornerstone 20% shareholding and executive director Chris Marshall has joined the board.

The funds invested in Manuka Health by Auckland-based Waterman Capital will be applied to growth initiatives which will assist the business to continue its rapid, export-led expansion. The company, a leader in the commercialisation of science-based biotechnologies for human healthcare applications, has a strong focus on research and development. The funds raised will enable it to continue to reinvest in this area.

Manuka Health utilises the unique healing properties of manuka honey and other bio actives from New Zealand native flora and fauna, to produce and sell some 80 functional foods, dietary supplements and wound-care products. It exports to 45 countries, where its product is sold through pharmacies, health food stores and department stores.

The business has enjoyed compound annual growth of more than 50% per annum over the last six years with annual sales reaching approximately $20m this year. Further growth is expected to come from a wound-care range which has been developed in conjunction with a U.S. partner and will be launched in New Zealand this month. The range uses manuka honey as the natural anti-bacterial agent in the dressing.

The company is seeking to scale up production to cater for forecast growth. Over the next two years, it will invest around $8m in a new processing facility in Te Awamutu, and centralise its warehouse and distribution centres, making it one of the largest employers in the region.

Growth in the health and nutrition sector is supported by a number of compelling global trends such as an ageing population, growing pressure on public health systems in the face of escalating demand, and increasing consumer awareness of health issues.

New Zealand manuka honey contains high levels of a bioactive compound, methylgyloxal, which is responsible for its unique antibacterial activity. These health benefits are gaining increasing recognition internationally resulting in strong demand.

Executive director of Waterman Capital, Chris Marshall says, "Manuka Health is strategically well-placed to exploit the many benefits inherent in this uniquely New Zealand product through its brand equity, production and manufacturing facilities and global distribution network.

"This is a fantastic New Zealand success story and Waterman is looking forward to being part of the next chapter," says Marshall.

Manuka Health founder and CEO Kerry Paul says, "Waterman brings capital to fuel growth and skills to support the company through an important period in Manuka Health's lifecycle.

"We have big ambitions for the business and this will certainly assist us in achieving them," says the industry veteran.

Founded by Kerry Paul, Manuka Health began trading in 2006 and has quickly grown to become a key player in the manuka honey sector. The company is the first in the world to introduce a robust, scientific measurement for rating the levels of the anti-bacterial compound, methylglyoxal, in manuka honey. It manages supply from the beehive to the shelf, producing and distributing manuka honey together with related functional foods, dietary supplements and wound-care products. Products are exported to 45 countries through third party distributors and then sold through pharmacies, health food stores or department stores. Manuka Health has ISO 9001 and ISO 17025 certification and accreditation under the NZ Food Safety Authority Risk Management Programme. The company is committed to producing effective, science-based natural health solutions and works with leading scientific research centres in New Zealand, Australia, Japan, Germany, USA and UK.

Waterman Capital is a New Zealand owned and based private equity firm established by Matt Riley and Chris Marshall in 2004. It is focused on investing in and adding value to mid-market businesses in New Zealand. Waterman Capital was the first manager appointed by the New Zealand Superannuation Fund (www.nzsuperfund.co.nz) for its Expansion Capital Strategy in 2010.

Waterman adds further depth to team

9 September 2011

Waterman Capital is pleased to announce that Lance Jenkins will join the firm as an Executive Director from September this year. Lance has more than 19 years' experience in financial markets including senior roles with Goldman Sachs JBWere in New York and more latterly as CEO of Goldman Sachs JBWere New Zealand. For the past 4 years he has held the position of Head of Equities for the Commonwealth Bank of Australia, based in Sydney.

Lance brings extensive knowledge of equity capital markets, deal origination and capital raising garnered through a successful international career. He holds an LLB/BCA from Victoria University and an MBA from New York University. Lance is an existing investor in both Waterman funds and has assisted the firm in previous capital raising exercises.

This is an important appointment for Waterman and is the product of our discussions with Lance over a number of years. The founding directors feel that the complimentary skill set he brings will enable the firm to continue evolving as a professional private equity manager. This appointment follows that of Jacques Venter in 2011 as Investment Manager, who has proved an invaluable addition to the team. We also expect to appoint an Investment Analyst prior to the calendar year-end.

Waterman Invests in Healthcare Sector

3 September 2011

Waterman Capital has today confirmed it has acquired 22% of the company which owns Auckland's Mercy and Ascot Hospitals.

Auckland-based Waterman Capital's shareholding in Healthcare Holdings Limited, the holding company which owns MercyAscot Hospital, has been acquired from Emerald Group.

MercyAscot Hospital is the largest private hospital operator in Auckland, with 19 operating theatres and over 250 beds across the city. It is a leader in cancer care, orthopedics, neurology and cardiology. The business also holds interests in a number of complementary joint ventures in the areas of cancer care, angiography, radiology, PET-CT scanning, endoscopy, laparoscopy and other general day surgery operations.

Additional assets within Healthcare Holdings include a majority interest in Kensington Hospital in Whangarei, and a minority interest in Boulcott Hospital in Lower Hutt.

New Zealand's ageing population has led to a major increase in healthcare expenditure in the last decade. The proportion of the population aged 65 years or older is estimated by Treasury to be 12%, but that group accounts for 40% of health expenditure. By 2050 the proportion of the population aged over 65 years is expected to be 24% with the share of total health spending increasing to 63%.

Executive director of Waterman Capital, Chris Marshall, says that the acquisition puts Waterman and its investors in a good position to benefit from these key demographic trends. Marshall will join the board of Healthcare Holdings.

"The key attraction for Waterman is the many opportunities for growth available to Healthcare Holdings. The business has a quality management team which has been together for some time with a clear mandate to execute on those opportunities."

The business recently invested in a leading edge Positron Emission Tomography - CT (PET-CT) scanning facility, which Marshall says is an example of showing leadership in the area of cancer care. PET-CT scanning enables the presence of cancers, and particularly their progress, to be assessed much more accurately than traditional diagnostic technologies.

Managing Director of Healthcare Holdings, Andrew Wong, welcomed Waterman as a cornerstone shareholder. "We look forward to working with Waterman. We have some exciting prospects ahead of us, they clearly understand these and are looking to support us through this next phase."

Established in 1997, Healthcare Holdings owns and operates the Mercy and Ascot hospitals in Auckland, holds a majority interest in the Kensington Hospital in Whangarei and is a minority shareholder in Boulcott Hospital in Lower Hutt. The business also operates a number of joint ventures in the areas of angiography, radiology, PET CT scanning, endoscopy, laparoscopy and other day surgery procedures.

Waterman Capital is a New Zealand owned and based private equity firm established by Matt Riley and Chris Marshall in 2004. It is focused on investing in and adding value to mid-market businesses in New Zealand. Waterman Capital was the first manager appointed by the Guardians of the NZ Superannuation Fund for its Expansion Capital Strategy in 2010.

Waterman Exceeds $75M Target

30 August 2010

Waterman Fund 2 LP, the second fund raised by Auckland based Waterman Capital, is pleased to announce it has received commitments for $83m exceeding its target capitalisation of $75m. The fund provides later stage expansion funding and capital for small to mid-market buyouts in New Zealand.

Following a first close on 1 July the fund received further commitments to achieve its target in a relatively short timeframe. Waterman is the first manager appointed by the Guardians of the New Zealand Superannuation Fund for its Expansion Capital Strategy, which is part of its global private equity strategy. The Guardians have committed $30m to the fund. Waterman has also received strong support from other local institutions, including the Accident Compensation Corporation and returning investors from its first fund.

The Fund will make equity investments into private New Zealand companies. Target companies will have proven business models and a profitable track record. They will require further capital to attain growth targets, to expand internationally, or to assist with ownership succession.

Waterman Capital is a New Zealand owned private equity firm established by Matt Riley and Chris Marshall and began investing in 2005. It is focused on investing in and adding value to small to mid-market businesses in New Zealand. For more information visit www.waterman.co.nz.

NZ Superannuation Select Waterman as Manager

5 July 2010

The Guardians of New Zealand Superannuation have confirmed a commitment of $30 million to become the cornerstone investor in Waterman Fund 2 LP (the Fund). The Fund has a target capitalisation of $75 million and is well on the way to achieving that total. As at 1 July it had already raised in excess of $65 million in capital and will now commence investment activity. The capital will be invested to assist the growth and expansion of capital-constrained, private New Zealand companies.

Waterman Capital is the first manager appointed by the Guardians for its Expansion Capital Strategy, which is part of its global private equity strategy. The Fund is the second private equity fund to be raised by Auckland-based Waterman Capital since its establishment in 2005.

In addition to the commitment from the Guardians, Waterman Capital has received strong support from investors who participated in its first fund raised in 2005, many of whom have substantially increased their commitment. Waterman Capital has also attracted a significant number of new investors and is close to finalising support from several parties that will take the Fund's capitalisation to above $75 million.

The Fund will make equity investments into private New Zealand companies with values ranging from $10 million to $50 million. Target companies will have proven business models and a profitable track record. They will require further capital to attain growth targets, to expand internationally, or to assist with ownership succession.

The Guardians' General Manager, Investments, Matt Whineray, said the Guardians had been actively seeking high-quality opportunities to invest in smaller, high-growth, privately owned New Zealand businesses constrained by a shortage of capital.

"This investment will assist with meeting the Fund's purpose of reducing the tax burden on future New Zealanders of the cost of New Zealand Superannuation," Mr Whineray said. "We are pleased that, in serving that purpose, we can assist New Zealand businesses to grow to their potential."

"Waterman targets a deep pool of private companies that represent the heart of the New Zealand economy. These companies often require additional capital and expertise to take the business to the next level. We see our role as partnering with business owners to overcome these problems and grow wealth for all stakeholders."

Mr Whineray said that the Guardians had followed a thorough process to select Waterman. "We use external managers only when we firmly believe that the manager is operating in an investment environment conducive to generating returns better than could be achieved investing passively; when the manager is utilising a sound investment strategy; and where the manager has satisfied our demanding due diligence hurdles."

"Waterman has established an experienced investment team with a proven track record of success in selecting private companies able to create value through growth and change", Mr Whineray said.

The Guardians already have significant investments in New Zealand, with some NZ$2.9 billion or 19% of their portfolio (about 31% including cash) invested in New Zealand equities, infrastructure, property, timber, other private equity and fixed income at 31 May 2010.

The New Zealand Superannuation Fund, which commenced investing at the end of September 2003, is designed to reduce the tax burden on future New Zealand taxpayers of the cost of New Zealand Superannuation. An ageing population means the cost of providing New Zealand superannuation is expected to double over the next 50 years. To prepare for this, the Government has made contributions to the Fund while the cost of superannuation is relatively low. The Fund will invest the money on a prudent but commercial basis and the Government will begin to make withdrawals from 2031, when the cost of superannuation has increased. As at 31 May 2010 the value of the Fund was NZ$15.9 billion.

For more information about the Expansion Capital Strategy, how the Guardians appoint investment managers and about the Fund generally visit www.nzsuperfund.co.nz

About Waterman Capital

Waterman Capital is a New Zealand owned and based private equity firm established by Matt Riley and Chris Marshall and began investing in 2005. It is focused on investing in and adding value to small to mid-market businesses in New Zealand. For more information visit www.waterman.co.nz.

Toll Holdings Acquires Express Logistics Group

2 November 2009

The board of Waterman is pleased to announce that on 2nd November 2009 Toll Holdings acquired the business of Express Logistics Group for approximately $62.5 million.

Whilst we had not been contemplating a sale, this is a very successful outcome for Waterman and it puts the group in a strong position going forward.

For further information contact:

Matt Riley or Chris Marshall+64 9 3620522

Toll Holdings Acquires Gluck PTY

10 June 2008

On 30 May 2008 International Forwarding Limited, in which Waterman Holdings owns a 28.5% stake, sold its interests in Gluck Pty Limited to Toll Holdings Limited. Under the terms of the sale agreement the price cannot be disclosed.

Gluck is one of the largest independent freight forwarders in Australia and clearly had strategic value to trade parties such as Toll. While this divestment was not consistent with IFL's longer term strategy in the sector the Board of Waterman considered the offer to represent good value for shareholders.

The shareholders of Gluck, including IFL, have retained Gluck's New Zealand business on a pro-rata basis. IFL has also retained its holding in the Australian warehouse and distribution business. We will provide shareholders with an update on these minor interests in the near future.

The Executive Directors are pleased with the outcome of this transaction and look forward to discussing this in more depth at the Annual Shareholders Meeting.

For further information contact:

Matt Riley or Chris MarshallWaterman Holdings Limited+64 9 3620522

Express Logistics Purchases Victory International Logistics

30 April 2007

Express Logistics Group Limited (ELG) is pleased to announce that, through its wholly owned subsidiary Express Logistics Australia Pty Limited, it has completed the purchase of Victory International Logistics Pty Limited (Victory).

The purchase is based on bringing together the strengths of Victory and Express in the Australian market, to create a strong freight forwarding, customs clearance and logistics business with a focus on the following key trade-lanes: China & SEA Imports; USA Imports & Exports; and Trans-Tasman freight, distribution & logistics.

"This acquisition provides further depth and scale to our existing Australian branch network," said ELG Managing Director, Graeme Mann. "The merger will create a number of positives for both Victory and Express businesses, clients, suppliers and staff. The end result will be a stronger combined business that will provide the aggregated client base with access to a broader range of services."

Waterman Acquires Shareholding in David Reid Homes

12 December 2006

Waterman Holdings Limited ("Waterman") announced today that it had acquired a majority shareholding in group building company David Reid Homes Limited. David Reid Homes is the master franchisor for a national network of 27 residential home builders.

The David Reid Homes brand is synonymous with quality and the company positions itself at the upper end of the group builder market. The group won 37 awards at the Registered Master Builders 2006 House of the Year Awards, highlighting the strong capabilities of the franchise network.

Both locally and internationally there is a trend towards group builders and away from independent operators. David Reid Homes is well positioned to benefit from this trend as the building industry continues to consolidate.

Consumers are increasingly seeking certainty around the quality, pricing and timing of a residential building project. Well organised national players with strong brands such as David Reid Homes are in a strong position to benefit from this flight to certainty.

David Reid Homes was previously owned by three individuals, all of whom remain as shareholders of the company. If you have any questions regarding this media release please contact either Matt Riley or Chris Marshall on 09 362 0522.